MOSCOW – Russia’s central bank might pilot its own central bank digital currency (CBDC) at the end of 2021, said head of the Bank of Russia Elvira Nabiullina during an online press conference on Friday.
“We view this project as promising, it fits into the concept of the digital economy [currently being built in Russia]. We want to evaluate the balance of risks and advantages of such a project before we proceed,” Nabiullina said.
Answering a question from CoinDesk, the central bank executive said the pilot would be carried out with a limited set of users and “might be possible at the end of next year.”
The Bank of Russia is currently receiving feedback on its report on the digital ruble published earlier in October, Nabiullina added. The decision whether the digital ruble will be actually launched, as well as whether it will use the blockchain technology, is up for discussion, the report indicated.
Addressing some of the details of the possible CBDC, Nabiullina said it’s also not yet decided if transactions will be transparent to observers. She stressed, however, that “maximum trust and maximum confidentiality” are key goals for the project.
The digital ruble, if issued, will not replace or push out other forms of money, physical cash and electronic payments, however. “People will decide for themselves which kind of money for which kind of purposes they want to use,” Namiullina said. Additionally, dedicated financial education programs should be offered to help people understand how to use the digital ruble.
“People and enterprises want fast, convenient, almost immediate payment transactions,” Nabiullina said.
Among the main challenges for the digital ruble, she named the need of robust cyber security and the potential feature of the offline use. The Bank of Russia is considering making the digital ruble available offline as well as via the internet, however, there are currently no feasible technological solutions for this, Nabiullina said.
According to the report, the digital ruble will stimulate innovation and competition in the financial sector and help ensure funds allocated to government-backed projects are not misappropriated.
In a later comment to the media, the central bank added that the digital ruble could help diminish the dependence of the Russian economy on the U.S. dollar and the threat of the future sanctions on Russia.
The authority is collecting public feedback on the digital ruble report until Dec. 31. An evaluation will follow and and feed into the decision on whether to proceed with a launch. The final decision will only be made after the pilot, the report said.